Angolan bank Banco de Poupança e Crédito (BPC) will be sufficiently capitalised by June 2020, and will become viable once its restructuring project is concluded, according to a technical report from the International Monetary Fund (IMF).
The report, drawn up following Angola’s request for financial support from the IMF and the approval of a three-year loan of US$3.5 billion, also said that the updated restructuring plan will include an additional recapitalisation and more credit transfers to the public entity for asset recovery (Recredit).
Founded by the government in May 2017, with an initial capitalisation equivalent to US$2 billion, Recredit was intended to focus on the acquisition of bad credit from public banks, and would be open to acquire problematic loans from all banks operating in Angola provided they were focused on the Angolan economy.
The IMF document also sid that appropriate governance arrangements and operational procedures (such as asset valuation, transfer pricing, debt settlement and sunset clause) will be established at Recredit to maximise recoveries by the end of March 2019 and minimise tax costs.
The Angolan government will also limit Recredit’s mandate to purchase bad loans from BPC, Angola’s largest bank by assets, which may benefit from additional measures in future evaluations.
The Banking Analysis Report 2018, prepared by Deloitte Angola, said that the ratio of overdue loans to loans granted in the entire Angolan banking system increased from 12.7% in 2016 to 40.2% in 2017.
“If BPC was not considered in this ratio, there would be a ratio of past due loans of 8.2% and 17.0% in 2016 and 2017 respectively,” the report said, adding indirectly that the public bank had ratios of 4.5% in 2016 and 23.2% in 2017. (macauhub)